As you might have heard, Donald Trump visited Nevada yesterday. When not instructing the locals on how to say the state’s name, he gave a quick interview to Jim Snyder of News3 in Las Vegas, which included this observation:
International tourism is important to southern Nevada's infrastructure. In the past, Trump has suggested 'getting tough' with American trading partners.
"But what if China said no more visas to go to Las Vegas and stay at Trump Tower," pressed Snyder.
"If China ever did that, and we cut off relationship with China, China would go bust so fast," said Trump.
This is a really stupid thing to say. It would be stupid enough from some average person on a sidewalk who happened to be captured in one of Jay Leno’s old “Jaywalking” segments. From a presidential candidate, especially one whose strong suits are supposed to be economic policy and trade, it’s worse in its way than the same candidate’s assertion (way back in installment #6!) that “there is no California drought.”
1. On the merits, the idea that the U.S. would or could bring China to its knees if we “cut off relationship” is just ignorant. Mr. Trump, perhaps you’ve heard about China’s holdings of U.S. Treasury bonds? Or in U.S. stock and real estate markets? Have any idea what would happen to them in a cutoff?
What about the countless U.S. businesses whose supply chains reach deep into China? Or the countless exporters, from Boeing to GE to most of America’s farmers, for whom China is a crucial market? Cavalierly saying you can “cut off [the] relationship” is like previous Trump speculation about breaking up NATO or using nukes. “China” might go bust, but it wouldn’t be the only one.
It’s also a misreading of the options China itself would have, in a scenario that would obviously be terrible for all parties. Here are some of the countries or blocs that already buy more from China than from the United States—that is, important markets other than the U.S. for Chinese products. They include: the European Union as a whole, which depending on how you measure is the first- or second-largest economic group in the world; Japan, next-largest after the U.S., Europe, and China; both Koreas; Australia; many countries in South America and Africa; nearly all countries in ASEAN. You get the idea: it’s most of the economic world. A U.S-Chinese “cut off” would hurt everyone, but it’s not as if China has nowhere else to go.
2. On the strategy, it’s equally foolish. Trump talks about U.S.-China relations as if they were just one more real-estate transaction. You’re always ready to walk; you bluster and play tough; and in the end, you get a great deal.
I resist family-based metaphors for public life. For instance, the federal budget is not like a household budget, despite obligatory assertions to the contrary in political speeches. Still, a far better parallel for U.S.-China relations than a real-estate deal is a long-term marriage. If a marriage is to survive, you don’t threaten to walk each day; you don’t talk about the other person “going bust so fast”; you do need to carefully hear some things and pretend not to hear others; you try to understand the world through your partner’s eyes; you recognize the interests of the extended family; and so down the long list. The metaphor obviously misses a lot, but it’s much closer to reality than the “make great deals!” view is.
Almost every American who has worked with, thought about, dealt with, worried about, or done business in China over the past 40-plus years has come to some version of this perspective. It’s tough for the U.S. to work with China, but the only thing tougher would be working against them as outright foes. Nothing in Trump’s comments about China suggests that he’s ever looked or thought beyond the “make a great deal!” real estate outlook.